U.S. Securities and Exchange Commission

Litigation Release No. 18004 / February 27, 2003

SECURITIES EXCHANGE COMMISSION v. ABSOLUTEFUTURE.COM, ET AL., United States District Court for the Southern District of New York, 01-CV-9058 (October 11, 2001).

SEC OBTAINS FINAL JUDGMENTS AGAINST NINE DEFENDANTS FOR MANIPULATING STOCK OF ABSOLUTEFUTURE.COM

The Securities and Exchange Commission ("Commission") announced today that on January 24, 2003 and on February 13, 2003, Judge Allen G. Schwartz of the United States District Court for the Southern District of New York entered final judgments against nine defendants and one relief defendant in the Commission's civil enforcement action charging a complex scheme to manipulate the stock of AbsoluteFuture.com ("AFTI") through the use of false and misleading press releases and manipulative trading techniques. Specifically, Judge Schwartz granted the Commission's motion for entry of final judgments by default against the following: Defendant AFTI; Defendant Edward A. Durante ("Durante") and five entities under his control: Berkshire Capital Partners, Inc. ("Berkshire"), Commonwealth Associates, Ltd. ("Commonwealth Associates"); Dottenhoff Financial, Ltd. ("Dottenhoff"); Galton Scott & Gollett, Inc. ("Galton") and Zimenn Importing and Exporting, Inc. ("Zimenn"); Defendant Roger M. DeTrano ("DeTrano") and an entity under his control, Commonwealth Partners NY, LLC ("Commonwealth Partners"); and Relief Defendant Exchange Bank & Trust, Inc. ("EBT"), which received $1.3 million in proceeds from the scheme. The Commission alleged in its complaint that Durante and DeTrano entered into an illegal funding scheme with AFTI pursuant to which AFTI provided 4.1 million shares of its stock to entities controlled by Durante and DeTrano, pursuant to sham consulting agreements. Durante used those shares, along with an additional 3.3 million shares which he purchased on the market, to engage in manipulative trading activities, including matched orders and illegal block trades, which increased AFTI's stock price from $0.21 per share in December 1999 to $6.00 per share in March 2000, an increase of more than 2,700 percent.

The judgment against all nine primary defendants permanently enjoins them from violating the anti-fraud provisions of the securities laws, Sections 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The judgment against AFTI, Berkshire, Commonwealth Partners, DeTrano, Dottenhoff, Durante, Galton, and Zimenn also enjoins them from committing violations of Section 5(a) and 5(c) of the Securities Act, which prohibit unregistered offerings. The judgment against DeTrano and Durante also enjoins them from committing violations of the stock-holding and reporting requirements of Sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder. The judgment against AFTI also enjoins it from committing violations of the corporate recordkeeping and reporting provisions of Section 13(a) of the Exchange Act and Rule 13a-1 and 12b-20 thereunder.

The Court also ordered payment of disgorgement plus prejudgment interest by AFTI, DeTrano, Commonwealth Partners, Durante, Berkshire and EBT. Specifically, AFTI was ordered to pay $850,000 plus prejudgment interest of $176,094, for a total disgorgement of $1,026,094. DeTrano was ordered to pay $401,112 plus prejudgment interest of $93,583, for a total disgorgement of $494,695, of which Commonwealth Partners was ordered jointly and severally liable with DeTrano for $198,188. Durante was ordered to pay disgorgement, jointly and severally with Defendant Berkshire and Relief Defendant EBT, of $1,615,227 plus prejudgment interest of $353,907, for a total disgorgement of $1,9698,134.

In addition to the civil enforcement action, the U.S. Attorney's Office for the Southern District of New York filed criminal actions against Durante and DeTrano for securities fraud. Durante pled guilty on December 7, 2001 and DeTrano pled guilty on January 25, 2002. On September 20, 2002, DeTrano was sentenced to 70 months in prison. Durante has not yet been sentenced.

SEC v. AbsoluteFuture.com et al., United States District Court for the Southern District of New York, 01-CV-9058 (October 11, 2001). Litigation Release No. 17180